• The FBM KLCI (+0.1%) staged a mild recovery yesterday after the key index traded in the positive territory for most of the trading session, lifted by selective plantations heavyweights. The lower liners – the FBM Small Cap (+0.7%), FBM Fledgling (+0.9%) and FBM ACE (+1.6%), all rose, while the broader market ended mixed.

• Market breadth turned positive as advancers outnumbered decliners by a ratio of 537-to-315 stocks. Traded volumes jumped 57.3% to 1.82 bln shares amid the generally positive market sentiment and return of many market players after the Chinese New Year break.

• Plantation heavyweights like KLK (+24.0 sen), IOI Corporation (+14.0 sen) and Sime Darby (+13.0 sen) topped the FBM KLCI advancers lists, while Astro and Axiata rose 7.0 sen each. Key winners on the broader market include United Plantations (+50.0 sen), Enra Group (+20.0 sen), Allianz (+18.0 sen) and BLD Plantations (+18.0 sen). Denko jumped 17.5 sen to RM0.63 after receiving a voluntary takeover offer of RM0.55 per share.

• Notable decliners on the broader market were Aeon Credit (-22.0 sen), Lafarge (- 17.0 sen), MBM Resources (-17.0 sen), Dutch Lady (-16.0 sen) and Caring (-11.0 sen). On the big board, BAT (-30.0 sen) Petronas Gas, (-24.0 sen), PPB Group (- 16.0 sen), KLCC (-12.0 sen) and Maybank (-9.0 sen) were amongst the biggest decliners.

• Japanese stockmarkets retreated yesterday as the Nikkei (-1.2%) erased all its previous session’s gains after the Japanese Yen rose against the Greenback, coupled with the weakness in corporate earnings from Toyota and Mitsubishi. The Hang Seng Index extended its losses by 0.6%, while the Shanghai Composite will only resume trading today after an extended Chinese New Year break. ASEAN stockmarkets, meanwhile, ended mixed.

• U.S. stockmarkets closed mixed as the Dow (-0.03%) closed marginally lower on concerns over President Donald Trump’s trade policy. On the broader market, the S&P 500 added 0.1%, lifted by gains in the utilities sector (+0.6%), but the Nasdaq fell 0.1%

• Earlier, European benchmark indices drifted mostly lower as the CAC and DAX fell 0.01% and 0.3% respectively, tracking the weakness on Asia benchmark indices. The FTSE, however, added 0.5% after the Bank of England held its interest rate at a record low of 0.25%, whilst the Monetary Policy Committee reported a brighter economic outlook.

The Day Ahead

• We continue to think that Malaysian stocks will continue to make some near term headway amid the generally positive market environment that will continue to draw market players back to the market.

• At the same time, more participants are expected to re-enter the market as they return from the Lunar New Year holidays. This could mean that the lower liners and broader market shares are likely to see increased following which bodes well for the general market conditions as it indicates a higher risk appetite.

• Consequently, we continue to think the key index could head towards the 1,680 level with the 1,670 level serving as the immediate support.

Company Briefs

• Gamuda Bhd‘s 50.0%-owned joint venture (JV) company, MMCEG-Gamuda JV is planning to end a nine-year legal battle with engineering firm Wayss & Freytag (M) Sdn Bhd, by paying RM109.1 mln as full settlement of the arbitration proceedings to the latter. The balance 50.0% in the JV is held by MMC Corp Bhd. (The Star Online)

• Excel Force MSC Bhd is partnering a global electronic trading solutions company, Ullink, in a bid to expand its clients’ trading connections. The group expects the collaboration to enable its clients, mainly financial companies in Southeast Asia, access to an extensive and established network of trading services via Ullink’s NYFIX global connectivity platform.

• Ullink is the owner of NYFIX — a FIXbased electronic trading community, connecting over 1,600 buy-side and sellside market participants, venues and trading services. (The Edge Daily)

• Alliance Financial Group Bhd‘s (AFG) unit, Alliance Bank Malaysia Bhd (Alliance Bank) has appointed Tan Sri Ahmad Mohd Don as its new Chairman and independent Non-Executive Director, effective 1st February 2017.

• Tan Sri Ahmad has a vast experience in finance and banking industry after having undertaken various roles in Pernas Securities Sdn Bhd, Permodalan Nasional Bhd and Malayan Banking Bhd (Maybank).

• Currently, Ahmad is acting as Chairman of Zurich Takaful Bhd, Zurich Insurance Malaysia Bhd, Hap Seng Plantations Holdings Bhd and Sunway REIT Management Sdn Bhd. (The Star Online)

• Vizione Holdings Bhd has raised gross proceeds worth RM58.9 mln following the completion of its two-for-one rights issue with free detachable warrants. The group managed to secure a final subscription level of 99.84% (or 582.9 mln rights shares) and the funds will be used to secure more construction projects in a bid to enhance its future earnings. (The Edge Daily)

• Public Bank Bhd‘s 4Q2016 net profit slipped marginally by 0.6% Y.o.Y to RM1.48 bln vs. RM1.49 bln a year ago – due to lower other operating income and net writeback of loan impairment allowance, as well as higher operating expenses. Revenue, however, grew 3.1% Y.o.Y to RM5.08 bln, from RM4.93 billion a year earlier.

• Further, the group has also announced a second interim dividend of 32.0 sen, payable on 28th February 2017. This brings the full year dividend for 2016 to 58.0 sen a share, representing a total payout of abour 43.0% (or RM2.24 bln) of Public Bank’s full year net profit.

• The group’s FY16 net profit was up 2.9% Y.o.Y to RM5.21 bln, from RM5.06 bln in FY15, while revenue gained 4.8% Y.o.Y to RM20.1 bln, from RM19.18 bln in the last corresponding year. (The Edge Daily)

• Denko Industrial Corp Bhd has received a conditional voluntary takeover offer from Oregon Technology Sdn Bhd at 55.0 sen a piece. Oregon is wholly-owned by Singaporean Foo Chee Juan, the CEO of ATA Industrial (M) Sdn Bhd, while the person acting in concert with him is his daughter Grace Foo Hui Ting, who holds one share in Oregon Tech. (The Edge Daily)

• Shin Yang Shipping Corp Bhd and Harbour-Link Group Bhd have taken legal action against PDZ Holdings Bhd’s vessel PDZ Mewah.

• Both parties have served PDZ Holdings with Writs in Admiralty Action in Rem (action against the ship) to seek delivery of containers which were shipped on board PDZ Mewah by Perkapalan Dai Zhun Sdn Bhd, a former unit of PDZ.

• To recap, the group had sold its entire shareholding in Perkapalan Dai Zhun to Salvage Point Ltd on 30th December, 2016. However prior to the disposal, the beneficial interest of PDZ Mewah was transferred from Perkapalan Dai Zhun to PDZ. The ownership change was shown in the Registrar of Malaysian Ships, Port Klang on 6th December last year and consequently, the vessel is now fully owned by PDZ. (The Edge Daily)

• Daya Materials Bhd has signed a Memorandum of Understanding (MoU) with the Technology Depository Agency Sdn Bhd (TDA) for the establishment of crowd/passenger systems solution for the transportation industry in Malaysia.

• The TDA is given the responsibility to operationalize the policy and guideline on Industrial Collaboration Programme in government procurement. The group said that further announcements on this proposed transaction will be made in due course. (The Star Online)  

Source: Mplus Research - 3 Feb 2017